2023-10-11 00:00:00 - Joint Committee on Revenue
2023-10-11 00:00:00 - Joint Committee on Revenue
(Part 1 of 2)
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SPEAKER1 - Also joining
us today.
We've had about 16 people sign up today. You just need a long day and we'll put it through it. As a tradition, we will get our lucky colleague on the report, and we'll follow-up tomorrow.
MICHELLE WU - CITY OF BOSTON - HB 2793 - Okay. Thank you so much Chair Cusack, Chair Moran, honorable members of the committee, and all who are taking the time to be here today. Thank you for convening this marathon session and allowing us to speak. I'm here today to testify in support of Boston's homeworld petition, House Bill 2793 an Act relative to real estate transfer fees and senior property tax relief with gratitude to the many generations of activists and leaders who have been urging for more resources for affordable housing for some time. Before I begin, I also want to just give my deepest thanks to Representative Brandy Fluker Oakley, who you'll hear from shortly, but, as you know, who is the legislative sponsor of this important home rule petition and who has been such an incredible partner for the city of Boston.
The rising cost of housing is the number one issue that I hear about from Boston residents, as well as from Boston's employers and workforce community. Half of our renters in the city and more than 40% of all households are paying more than they can afford on housing costs. These rising costs are deepening racial and socioeconomic disparities among those who are housing insecure. Nearly 60% of renters of color are housing costs burdened, compared to just 38% of white renters. 87% of renters with incomes less than 30% of the area median income our cost burden as 70% of renters with incomes between 30 to 60% of the AMI.
In Boston, our overall homeownership rate is just 35%, considerably lower than Massachusetts's homeownership rate of 62%. So we particularly feel that147 burden on renters. And their deep racial disparities present as well. In Boston, we're pulling every lever and exploring every possible option. I'm thankful to my team who are here today as well. Chiefs of housing and of planning, Sheila Dillon and Arthur Jamieson are, assessor Aranello and, many others from our team who have been working on this and and partnering with the state. We're doing everything we can at the city level.
Overhauling our zoning code for175 more housing and more affordability, restructuring our planning department to ensure we're using every bit of land possible, providing tax incentives for converting offices into residential buildings, and providing down payment assistance and interest subsidies to homebuyers to accelerate wherever we can. But the one powerful tool that remains out of reach without legislative and gubernatorial approval is a transfer fee. We've had the opportunity to use the generational ARPA funds, and the federal recovery funds from the pandemic, and208 in Boston, we devoted more than half of these funds to addressing the housing crisis. The results have been remarkable. Last year, the city of Boston permitted more affordable housing units than in the last 25 years.
Through these federal funds, we created directly 794 income-restricted affordable housing units, and more than 300 new homeowners have been able to purchase their homes because of our down payment assistance programs created through this federal funding as well, including residents in a new program, that Boston has led on with a direct pathway from Boston Housing Authority subsidized housing into homeownership. As this federal funding is running out and as we look to try to find other ways to keep up this momentum, the transfer fee is one opportunity that many municipalities are here today to explore, requesting the ability to sustain the actions that we've been taking for our communities.270 Boston's home petition was passed unanimously by the Boston City Council in 2022.
And it would impose a modest 2% transfer fee on real estate transactions over $2,000,000 with that first $2,000,000 completely exempt. As an example, that means that287 if a property is sold for two and a half $1,000,000,289 the fee would be just $10,000 at the moment of sale when the funds are liquid. Based on data from 2021, this fee would have only affected 700 transactions out of300 a total of more than 10,000 property sales in our city. But would have generated up to $100,000,000 in local revenue to sustain our affordability and housing production efforts. Revenue raised through this fee will help us313 build supportive housing and ensure that our seniors can stay in317 their homes. It will help build new homes for families who have been forced out by skyrocketing prices and make it possible for more first-time home buyers to put down roots and raise their families here in Boston.
We know that this proposal has been up before the state house multiple times332 before, with the city council voting and myself taking that, but when I was on the council, I want to flag that this petition currently before the committee is different from those that have come for. It specifically creates a provision to raise the number of older homeowners who would be income eligible for the 41C senior property tax exemption, nearly doubling the number of seniors who could stay in their homes because of this, and we would be dedicating a portion of these funds to go to that very important need. I have met many of these seniors. They spent their lives in our city raising their families in our neighborhoods, fighting to build community.
Today, when they should be enjoying their lives, they are fighting to not be pushed out of the homes that they have raised their families in, to be able to pass something on to the next generation. An increasing number of residents eligible for this exemption will be able to provide peace of mind and stability to our elders, their families, and communities across our neighborhoods. We desperately need the ability to sustain our affordable housing efforts in Boston. I thank this committee for your consideration and respectfully ask that the committee report Boston's Home Rule Petition out favorably and give us the chance opportunity to raise revenue locally to address our urgent housing challenges. Thank you so much, and I'll pass it on to Representative Brandy Fluker Oakley.
REP FLUKER OAKLEY - HB 2793 - Thank you so much, Madam Mayor, and Sue, all the City of Boston employees and advocates who have fought for this legislation. I'm deeply grateful for your leadership and for your support of this legislation. Thank you, Chair Moran, Chair Cusack, and fellow members of the revenue committee. I'm Brandy Fluker Oakley, state rep for the 12 Suffolk District, which includes parts of Mattapan, Dorchester, and Hyde Park in432 the city of Boston, and parts of the town of Milton. Thank you for taking me out of436 turn and hearing this testimony and having this438 hearing. On H 2793. As I'm sure most of you in this room are aware, Boston like many major cities across the Commonwealth and the United States448 is in a housing crisis. It has been exacerbated by our COVID-19 pandemic.
Last year, the Boston Foundation president and CEO gave the greater Boston area a failing grade when it comes to housing accessibility, equity, and availability based on their annual housing but it would also improve the overall financial stability of the city's residents. The transfer fee has the potential to yield millions for affordable housing. These funds collected as a result would go into the city's neighborhood housing fund to provide more opportunities for homeownership, deed-restricted rental housing for those with low to moderate incomes, and supportive housing for seniors and people who are facing homelessness just to name a few. In my role, as a state representative, I see firsthand the detrimental impact a lack of affordable housing has on Black and Brown communities in the urgency with which we need to find solutions.
Mattapan neighborhood from where I grew up and still own a home today has the highest eviction filing rate in the city of531 Boston. The need for affordable housing is real. Mattapan also has the largest Black home ownership in the Commonwealth of Massachusetts. These are seniors who bought their homes in the sixties, the seventies, or my mom in the early eighties who have made the communities what they are, who have given their life to sustain them and now needs to552 be able to pass it on to the next generation because guess what you all? We don't have enough senior housing available if these folks lose their homes.
They shouldn't be forced to leave.560 Because of the rising real estate taxes that make their homes unaffordable. H 2793 helps us to build a more equitable housing fee year where everyone has access to affordable housing and housing stability regardless of their zip code. I want to recognize and thank, the579 Mass Senior Action Council Villers, and others who have been fighting for housing stability581 and access that impact our elderly neighbors. Once again, thank you to Mayor Wu for being here587 today to testify, and thank you to this committee that reported this Bill out591 favorably last session, and I urge you to do it again this session. Thank you so much for your time. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you, Representative, and mayor Wu. Any comments or questions from the committee?
SPEAKER5 - I have a a quick question. Sure.
SPEAKER1 - Madam, chair.602
SEN MORAN - COMMITTEE SENATE CHAIR - Thank you both so much for your testimony. Thank you,606 Chair. Can you give me a couple more examples of opposition that you've overcome this time when we talk about this Bill having concerns and, you know, where you're at with that620 now and reasons that folks who made in the past been reticent might be, more convinced now627 to the brain?
WU - Well, I don't want to633 speak,633 on behalf of others, but I'll share a little bit of the types of outreach that we've been doing in the communities whose input has been reflected in this. One major change has been, as I mentioned, the clear dedication to where these funds would go I think broadly, we have, proven that the neighborhood housing trust and affordable housing funds at the Boston Runs are incredibly effective in generating housing. staying in their homes and, particularly with the, growing stresses and costs, that has been an important provision that, has never before been before, the state legislature. We also have had, I would say, a growing recognition among all sectors, this community, the real estate community that our housing production and housing affordability is the maker-break issue when it comes to our economic revitalization as the pandemic receives.
So in terms of conversations, even within the real community and with developers, it might not be reflected in the kind of, overall, organizational representation, you know, sort of certain organizations that, have a position and are worried about any kind of slippery slope. But if you ask anyone in the Boston Real Estate community, they will clearly acknowledge the need, especially at this moment, for ways to stimulate housing production and to have the public sector participate in closing some of the financing gaps as interest rates are incredibly high. one other item that is maybe different than the context in previous cases is that we really are showing that the city is doing everything possible that we could do alone. Zoning reform has been a little bit of a hot potato issue in Boston and badly needed.
Chief Jimison and his team have been digging right in and it's it's not always easy to, move forward with plans that will over the next 30763 years generate a lot more density in certain to the city, but we have been very clear that for Boston to remain a community where people from all backgrounds and, a commune a true community with income levels from all backgrounds as well can drive. We have to be boosting that housing wherever we can and784 where it makes sense to the community. I think those are some of the initiatives, you know, partnering with the real estate community on some of the tax incentives and other programs. This has really been, let's use every possible tool, and this is one that would help if I'm not too straight to this internally. The transfer fee would be one that provides sustainability when the funds are readily available and aren't increasing the upfront costs of getting a project financed or into the ground. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER5 - Very helpful. Thank you.
SPEAKER1 - Representative. Thank you
REP UYTERHOEVEN - Thank you both so much for, your testimony and for this, work you are doing. I was wondering if you could just speak a little bit about, what Boston has done with the ARPA something as an example of what is possible. I think one thing that, is important about the arguments for the real estate transfer visa. It closes these gaps and makes and unlocks a lot of affordable products and affordable housing projects possible.
WU - So I want to Thank you so much, representative. I will share a few examples on it, and I believe Chief Dylan, you know, could add a lot more detail to this, but there are a number of different programs that we have launched really, again, to try to demonstrate that every rock that could possibly be, turned873 over to do something on housing we are doing. So some concrete examples in East Boston, the what's known as the BlueLine portfolio. It's an innovative never before, never-before-seen collaboration where community organizations, financing organizations, and the state and city have come together to actually bring a portfolio of 114 different units that already existed in the neighborhood. So we're not even talking about having to wait years to build new housing, but taking housing that is on the private market and using this financing to forever protect it and make it permanently affordable.
It's 26 different buildings, 114 units, and that is now just, you know, out of the housing stock in a neighborhood that is also gentrifying very quickly and with residents at such great risk of displacement to be able to immediately see that difference existing housing stock. On the new housing side, again, Sheila will have better numbers,929 but we've put tranches of funding, with huge. We're seeing them get going in an otherwise stalled housing market. So that 794 unit count is just from federal mostly our is from ARPA funding, mostly, but federal funding, in the last year, what we've been able to do and, I959 don't know if she left quite961 can remember what, you know, that's the about 800 units, about how much how many dollars of ARPA funding for that per unit. Yes. So it's a subsidy but, again, the chance to get it978 going now makes a big, big difference.
We've also done an audit of every square foot of city-owned land and those have been either smaller parcels in neighborhoods, where we've identified 150 vacant lots in our welcome home Boston program, and those lots, put out for RFP for local developers with preference to MWBE Companies and, Boston based businesses and development companies to build smaller multi-family homes on those parcels that are affordable. As well as identifying large parcels, for example, the Boston Water1013 and Sewer parking lots,1015 where we will be able to replace that parking for city workers, as well as build, likely hundreds of units of affordable housing on previously, just sort of blank city-owned lot, land and a parking lot. Same thing in Charlestown with the Bunker Hill lot. There's a huge opportunity in that parking lot to provide much-needed affordable housing along with green space, recreational space, and meeting other community needs. So our approach has been, The goal is that every time we an action, it meets multiple community needs when the public sector is doing that.
REP PAULINO - Quick question. When I read the Bill, the face of the Bill, you refer to real property. Is that correct?
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correct?
SPEAKER8 - Sorry. Can
SPEAKER3 - you say it again 1 more time representative?
PAULINO - In the face of the Bill. You refer to transfer a real property. Is that correct?
WU - Yes. Correct.
PAULINO - Okay. There's a huge difference between real estate property and real property. Real property includes everything, including ownership, right to possess, to sell, lease, and enjoy. Let me give you an example. I'm talking about the law. Once we pass a law, even if we get a lawsuit, they will read the face of the Bill line by line, and they will interpret that according to the scripture on the Bill. So let's say I live a1122 person. I own a real property, and I transferred the right to live in that property. To my son. Under this Bill, my son, we have to pay, or to a friend, we have to pay for the exercise. Is that what you're trying to accomplish with this Bill?1142 Is that correct?
FLUKER OAKLEY - Representative Paulino, this Bill excludes family transfer. So in the hypothetical you just gave, it would not apply.
PAULINO - Let's say for a year, I give a friend the right to stay in my property in Boston. According to this Bill, my friend is not related1166 to me, we have to pay the exercise tax. Is that what you're trying to accomplish?
WU - Well, first, I don't think so. But I will say, it only applies to $2,000,000 and above. So unless it's it must be a very nice place if it's $2,000,000 for a year where our intention is to just catch the permanent property sale. So the language is, it is amendable for the legislature. So if there are intention was to I think we meant what what you're saying in terms of real estate property rather than just the rental rights or the lease rights and, open and defer to our sponsor in terms of whatever amendments might be needed to to clarify that.
PAULINO - Yes. So when we get a hearing, when we're trying to review a Bill, we need to make sure what we are if we give a favorable review that way you intentionally are in the paper. If we go to court, the judge will interpret the intention of the Bill. Right now, is too vague. Another sample, this is Bill, and I love what you're trying to do. We had some problems on ours, but I'm going to say, that many of these will try to help seniors, and I believe in that. Seniors are very vulnerable, especially in the housing market right now. However, many seniors in the city of Boston transfer property to an irrevocable trust or to an LLC, they do that because they're trying to do state planning and protect the asset in case they end, they having to be included in a nursing home or anything happy to them.1268 So imposing this, SSI tax on that, on real property, even if it was real state property. We make it harder for those seniors who live their entire lives in Boston, and now they're trying to protect their assets, for retirement. Do you consider the consequence where you are, under this Bill?
FLUKER OAKLEY - Representative Paulino. I appreciate your line of questioning, and again, any edits that need to be made through1300 the media refined, but to answer your last point, when this analysis was conducted, it only impacted around 756 properties in the entire city of Boston. So the example that you are articulating does not impact the average person who holds real estate or real property in the city of Boston even with only having the 2% tax on those estimated 756 properties. You had great benefits, but not only developers could use to build more affordable housing. So what you're articulating actually isn't as prominent or prevalent as it is in your hypothetical.
PAULINO - But it's not theoretical. It's what the Bill will create. Those are the issues that will be created for that vulnerable part of the population when they try to transfer property for state planning into a trust or an LLC. So my job, like, like I said, is to review it to see, I know the intention. I support the intention. However, the language of this Bill as it is for me is very vague and it doesn't accomplish what you're trying to do.
FLUKER OAKLEY - Representative, thank you so much. Again, this is a space to highlight all the ways in which we want to continue refining the language. I phoned a friend and Chief Dylan, pointed out to me that the language that's in there now in terms of the exemption for family transfers and transfers of convenience is meant to include the LLC, and personal protection transfers as well. So it would not be included. If it's helpful to clarify that more, happy to do that. We want to ensure, you know, most often, we're hearing that when seniors are transferring, it's two1397 family1397 members or to take that action as you're1399 saying. That the intention is not1401 to include that as it's, written with the words in the Homeworld petition. Thank you.
REP CUSACK - COMMITTEE HOUSE CHAIR - Yes. Madam Mayor, you mentioned maximizing all the tools in the toolbox. So out of curiosity, is there any plan the city has with the1415 city council whom the other councilors will be testifying, to increase your Community Preservation Act funding?
WU - In terms of going for another valid,
CUSACK - You're at 1% now. You can maximize the 3% it can be used for affordable housing. Has that been looked at as an alternative tool? This transfer fee?
WU - Yes. We've already, okay. So just to be totally direct with you, we have not explored that directly in terms of going for another ballot initiative and, you know, a citywide campaign to boost that number. That is something that would apply to, every single property owner in the city of Boston, including those who are of, you know, underneath that $2,000,000 threshold. So our goal was to try to really through, you know, put equity at the forefront in what we're doing and find ways to, relieve the burden on more of our local residents. We have been using way more of the Community Preservation Act funding for housing than is the minimum required. Right? So instead of just the basic 10% or so, it's been the majority of how our CPA funding has been as well, and that's been a very important source to, close the financing gap for many affordable housing in addition. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Okay. Thank you. Any more comments or questions? See you, none. Thank you very much.
SPEAKER3 - Thank you very much.
SPEAKER1 - You're welcome.
Next, I'll call up the register of Suffolk County, Register of deeds, Steven Murphy.
SPEAKER7 - Uh-uh.
SPEAKER5 - Thank you.
SPEAKER9 - Good morning.
STEPHEN MURPHY - SUFFOLK COUNTY - HB 2894 - SB 1799 - Good morning, Mr. Chair, Madam Chair, and members of the committee. I'm honored to be here before you. Before you today on House 2894 and Senate 1799. I have some facts and figures that I wanted to go over with you from my perspective as the register of deeds in Suffolk County. As you know, we have county registries of deeds, and Suffolk represents about 20% of the revenue that the Commonwealth gains. So, this particular Bill has to do with increasing the deeds excise tax which now stands at $4.56 per $1000 of valuation. A sales price on a $1,000,000 property results in the deed excise tax of 4500 and $60. In Connecticut, a sales price of $1,000,000 property results in the deed's excise tax of $8500 in New Hampshire. The sales price of $1,000,000 results in the deed excise tax of $15,000. In Vermont, a sales price of $1,000,000 results in a deeds excise tax of $13,550.
In Maine, which is more in our ballpark a $1,000,000 gets you a deeds excise tax of 4,400 in Rhode Island at 55.20.1624 The deeds excise tax is collected by the Commonwealth from the seller at the point of sale. My experience over the last few years in Suffolk County, specifically within our seaport, is that the sales are going from one LLC limited liability to one company to another. The amount of money we're leaving on the table by not hiking our deeds, and excise tax to a similar in Connecticut, New Hampshire, or Vermont is an amazing amount. The deeds excise collections in Suffolk for the last few years were as follows in 2017 $76,000,000 in 2018, $79,000,000, in 2019, $81,000,000 a little bit of a setback in 2027 $79,000,000, in 2021 $98,000,000, and in 2022 with a considerably cooler real estate market $77,000,000. If you multiply that by, if we're 20% and we generally are, then we would leave 77,000,000 on the table.
If we hiked the deeds excise tax to double, we would still be underneath Connecticut, New Hampshire, and Vermont. We would gain another 77,000,000 in Suffolk alone. That's in 2022, multiply that by five. You're $385,000,000. There's a lot of money being left on the table. I'm seeing mostly LLC transferred to LLC. There are, anecdotes, like in with families in 1989. I was able1743 to purchase a house in Boston. I paid $90,000 for it. We sold that1749 house last year in 2022 for $987,000. The deed's excise tax would come out of that sale. It would be doubled if you choose to double it. But we walked away fat dumb and happy with the $987,000 that we walked away with. So I see a lot of competing interest here, and it's in the purview of the legislature to decide whether or not accept this, but this seems to me to be a, going to feel in your neighborhoods. For me and for Suffolk, the LLC is getting taxed at the point of sale, not a big deal. It's a cost of doing business. That's why I'm here, and I hope you'll consider what I had to say moving forward. Thank you for the opportunity, and I appreciate it. I would take any questions this time.
MORAN - Oh, thank you so much, for testifying. One of the things that I would wonder about is, for example, Barnstable County, which, of course, has the county government funded, by the sole source of, county tax. So that would kind of hike up those properties.
MURPHY - It could. There are several counties that are not part of the state system. I am one of the counties that in 1988 was, put under the jurisdiction of the secretary of the Commonwealth. They're responsible county, Plymouth County, Norfolk County, and Bristol County but are not part of that. You would probably have to do some sort of tweaking to this legislation to keep their hand in the chill if you want.
MORAN - So it would have to be adjusted.
MURPHY - It would be industries. I'm here speaking specifically on Boston's problems as the Suffolk register and as1888 the secretary of state overseeing the1890 registry.1890 SHOW NON-ESSENTIAL DIALOGUE
SPEAKER5 - Thank you very much. Thank you.
SPEAKER1 - Thank you. Any other comments or questions? See you, none. Thank you. Thank you. I've also been joined by Representative Gary. Yep. Next step is Reverend Representative Kamay and Ghentil. Kamay?
REP GENTILE - HB 2730 - Well, thank you, Chair Cusack, Chair Moran, and members of the joint committee of revenue I'm here today in support of the Bill that I filed with Representative, Simon Cataldo, House 2730, an Act to establish a real estate transfer fee upon the transfer of property in the town of Concord. This home rule petition it adopted at multiple annual town meetings in Concord, and it would authorize Concord to impose a real estate transfer fee to be used by the time for the purpose of acquiring, creating, preserving, rehabilitating, restoring, and supporting affordable housing in the town. The town meeting has already appropriated $4,000,000 for the fund.
This fee would equal to would be equal to 1% of the portion of the purchase price for real estate exceeding $1,000,000. The petition contains several reasonable exceptions to prevent adverse effects. For example, it exempts families, transfers to charitable organizations, and affordable housing development. The payments would be deposited into the Concord Municipal Affordable Housing Trust Fund. Well, I think we know the commonwealth needs to support a variety of housing to meet our diverse needs of different ages and income levels. The governor recently created a new cabinet-level secretary to bring attention to and elevate the focus on housing and livable communities in the Commonwealth.
The rates of homelessness and housing cost burden households have reached unsustainable levels. Concord's FY 2023, 2028, housing production plan report reports that Conkett's housing market reached a new height in 2021 when the median sale price of homes reached 1,250,000, with the median price for single-family homes at 1,400,000 condominiums at $765,000. a transfer fee. Yes. The Concord Municipal Affordable Housing Trust Fund allocates funding in support of affordable housing to benefit families and individuals with low to moderate incomes of up to 150% of the area's median income. So I would respectfully request that the joint committee report the Bill favorably, and thank you for your time. Happy to answer any questions. Thank you. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you, Representative. Any comments or questions from the committee? Seeing none. Thank you.
SPEAKER12 - Thank you very much.
SPEAKER1 - Next up is Senator Eldridge, Representative Higgins, and Representative Montania.
On your different bill? Sorry about that,
Okay.
REP MONTANO - HB 2894 - SB 1799 - Hi, Chairs, some members of the2109 committee. Thank you for taking us out of turn. We are here to speak on h well, in the house. H 2894 an Act providing for climate change, adoption, infrastructure, and affordable housing investments in the Commonwealth. This Bill is colloquially referred to as the HERO Bill Housing and Environmental Opportunities. It's an incredibly timely Bill, across the Commonwealth, we have seen and experienced the housing crunch further intensified by the volatile and aggressive weather patterns that have resulted from climate change. There's no other Bill like this in the legislature that aims to address these two deeply entwined issues. By leveraging a relatively small fee, most folks will only pay once or twice in their lifetimes. We create a pipeline to respond to the housing crisis and climate crisis. Some details about the Bill. This Bill would double the deed excise fee on home purchases from $4.56 per $1000.
To $9.12 per $1000, which is still lower than that of Connecticut, New Hampshire, New York, and Vermont. I know that in Massachusetts, we like to be among our other New England colleagues and devote the estimated 300,000,000 in annual revenue raised to climate resilience and affordable housing. Half of the new revenue would be dedicated to climate mitigation and resiliency through the Global Warming Solutions Trust Fund, and the other half would go to the Affordable Housing Trust fund, aiding low-income renters and unhoused folks through the Housing Preservation and Stabilization Fund. Both things, we need revenue forward to address the housing and climate crisis. Actually been involved with this Bill for four years predating my time in the legislature. I have a legislature I was involved as an affordable housing organizer. I have a testimony on this Bill to the committee for two years. Where are we? three years ago. Now I'm the lead House sponsor. So full circle, turn for me. I grew up with fairly constant housing insecurity raised by a single2214 mom and my grandma.
I know the stress that comes from not knowing if you'll be evicted or if you'll have2218 one more day to pay your rent or mortgage. Anything that aims to address our housing crisis, particularly for low-income folks is essential. Addressing our climate crisis and the same Bill is brilliant. I respectfully asked for the committee to advance this Bill with a favorable vote. Let us take the steps necessary to address the crisis knocking at our doors. I know that a lot of folks particularly in the central Mass area have experienced the climate crisis. It's impacted their housing. We also heard that in the Southern Worcester area, there were fractured, foundations from the poor, from the crumbling, earth. This Bill would help folks retrofit their homes, get them ready for the climate crisis, and help us meet our future. What are we going to reach for? 2050 goals now. Also, address the housing crisis, particularly for low-income folks across the board. So as we're addressing the shelter and migrant crisis, and the folks who are already currently on the House who are seeking housing as it stands. Thank you.
SEN ELDRIDGE - HB 2894 - SB 1799 - Great. So thank you so much to Chairman Cusack, Chairwoman Moran, and members of the joint committee and revenue. So proud to partner this Bill now with Reps Montano. I remember working together during Reps Montano's time with JPNDC. This is sort of a unique Bill as Reps Montano said because you have, climate, groups, and affordable housing groups coming together to advocate for, Senate 1799, and House 2894, known as the HERO Bill Housing Environment Revenue Opportunities. I know you'll hear from MAPC MacDC and many other groups today, and, Suffolk County Register of Deeds already highlighted this Bill in many ways in his testimony that the idea is to double the deed excise fee It would still be lower than Connecticut, New York, New Hampshire. Half of that money would go to the global warming trust fund.
Half of it would go to two affordable housing trust funds, a total of expected $300,000,000 a year to truly do our part to combat climate change, as well as to build affordable housing in our communities. My communities, keep on asking for more funding for client resiliency as well as money for affordable housing. This would accomplish both goals. I do think in 2023, we need to have a dedicated revenue source for affordable housing for climate resiliency and the reality is we do not have a dedicated revenue source for, specifically each purpose right now. Chairwoman Moran, I know you had asked about counties having different rates. So that is absolutely the case. So, you know, would, appreciate the chairs of the committee, you know, making adjustments to make sure it's fair because this is a statewide Bill. But this Bill has a really powerful coalition behind it. So I appreciate your consideration. Then I personally just want to be on the record, for all of the real estate transfer2390 tax statewide local option real estate transfer tax Bills. So thank you so much for taking us out of turn.
MORAN - I would also, like to voice my support for the transfer fees that are going through your committee as well. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you, Senator. Representative. Any comments or questions from the committee? Seeing that. Thank you. Thank you so much. Representative Higgins?
REP HIGGINS - HB 2824 - SB 1834 - Thank you, Chair Cusack, Chair Moran, and honourable committee members. I'm here to testify in support of House Bill 2824, so that could have been the mix-up there. Senate Bill 1834, which I'm proud to work with Representative Barber and Senator Gomez an Act to support educational opportunities for all This is a Bill near and dear to my heart because many of you know. I'm a proud first-generation college student and have spent the last decade fighting for more affordable and accessible public higher education. This is a Bill that would tack 11 universities' endowments in excess of $1,000,000,000 at just two and a half percent. You get your first billion, you know, no impact, but anything in excess of a billion is two and a half cents. It would raise more than $2,000,000,000 for not only public higher education funding but early education opportunities. Impacting the most marginalized communities who often don't have access. In the time that I have had an opportunity to work on this Bill.
The potential revenue from this proposal has increased from 1,600,000,000 to just north of $2,000,000,000. There's a lot of wealth held by our private universities, and they're really lucky to have it. We just want to make sure that not every student has the opportunity to go to Harvard or MIT, but their endowments have the opportunity to make sure every single resident of Massachusetts can get a college degree and have that opportunity. Just to put into perspective, the kind of wealth that is held in these endowments, in 2022 is $95,000,000,000, that's nearly twice our state operating budget. We're asking for this to lift up opportunities in communities like mine. While Massachusetts boasts, a college attainment rate of more than 50%. In my community of Lemenster, it is less than 30%. In most gateway cities, it's less than a quarter of the residents. This would make sure that parents have access to early education and care and can work in support of their families and that those students can go on to college and make that a reality and lift up all of our communities. So thank you for your time welcome any questions. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. Representative Higgins. Any comments or questions from the committee? See you now. Thank you. Representative, Mike Connelly. Thank you,
REP CONNOLLY - HB 2747 - Chair Cusack, Chair Moran. Thank you for taking me out of turn. I'm here to speak in support of my Bill, H 2747, and I granting a local option real estate transfer fee to fund affordable housing. This is a refile with certain technical changes, which you'll hear about. I'm also here in support of a Bill I filed with Representative Uyterhoeven and my Somerville colleagues. This is the Somerville home rule transfer fee, H 3845. I also want to speak in support of Cambridge's home rule transfer fee filed by Representative Decker H 4063. I think the theme of the testimony that we've heard so far is that we are in an unprecedented, affordable housing emergency. Never in our history has affordable housing been this out of reach to this many people. Never has2611 homelessness been just pervasive on our streets or in our parks, and really across the Commonwealth.
What we need are more options and more tools. I'm so grateful that so many people are here today, from elected officials to advocates, to activists, as well as real estate industry professionals whom you will hear from. We've heard from those who are engaged in the real estate business and have told us that we need to do more to address this crisis, and more resources are absolutely critical. The local option transfer fee would give the city or town a tool to fund affordable housing in the2650 form of a levy of 0.5%. Up to a maximum of 2% on real estate transactions above $1,000,000 or the county median sale price for a single-family home. If a municipality's counting median price is below $750,000. If that sounded like a bit of a formula, it's a very intentional effort to account for the disparities, in values that we see. Around the Commonwealth, while at the very same time, offering something that is applicable and flexible statewide.
All funds generated by a municipality's transfer fee would go to the local affordable housing trust. The Bill would mandate certain exemptions. I know we've heard, concerns about exemptions, and so this Bill would exempt transfers to family or government, and it would allow cities and towns to craft further exemptions that would make sense on the local level. The exemption flexibility is important. I think that's reflected by the fact that there are 16 cities and towns that have sent us home real transfer feed petitions. They're all a little bit different, and it's our understanding, that more local option petitions around the way, more home rural petitions. I'm very proud of the growth of our Coalition, the local option for housing affordability, and the low coalition. It includes the state's largest private employer, Mass General Brigham. It includes municipalities and planning agencies, the MAPC, Chappa, and so2750 many other, trusted affordable housing kids who are here today to tell us, that we have to move forward finally with this local option transfer fee.
We've taken important steps in recent years from, passing zoning reform to more recently, passing a protection that would protect those facing eviction while they are seeking rental assistance. But clearly, we have to do more. You know, no one is coming to save us. It will be up to us as legislators and leaders to take action to finally address and turn the corner on this ongoing affordable housing emergency. So, for those reasons, I respectfully ask the committee to report the local option Bill out favorably, I would ask you to, once again, report out favorably the home rule petitions I'm looking forward to hearing some of our local officials who you'll hear from later, including Mayor Valentine from the city of Somerville, city manager, E. ON Wong, from the city of Cambridge, Somerville City Council president venue and camping, and at large solar trade. Wilson is here, as well as several others. I also want to associate myself, in support of the HERO Bill, as well as the Act to establish a Moral Budget Commission, which you'll hear from today. Thank you. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you, Representative. Any comments or questions from the committee? Representative, Gary? Same.
REP GARRY - Thank you for the Representative. Just wanted to get something with the average, single-family home in your district.
CONNOLLY - You know, I'm sorry to say I'm not in the market to buy a home, so I'm not totally familiar. I would guess that it is in the $1,000,000 range. It's around $925,000. Thank you. Alan Schecter, director of housing stability. 1,800,000, No. I appreciate the question. I think it really raises a good point because, you know, I just love to emphasize that you know, the experience of being a renter in our community, and I think the experience across our community is that we witness 1,000,000,000 dollars of investment that comes into our community. Then in the form of real estate transactions, we see, you know, billions of dollars of wealth that is created.
As we think about this concept, I think it's important to remember, that we want homeowners to do well. You know, we want property owners to, you know, seek the benefit of their investment. But at the same time, we need to remember all of that wealth isn't created by one individual. The wealth is being created in our community. Thanks to our policies, our values, our people, our workers, you know, those who contribute to the culture of our community. So what we're saying with this transfer fee is, as this wealth is being extracted out of our community, often by corporate investment or commercial real estate developers, can we just capture a tiny fraction of that work and put it into local affordable housing programs? So more people can have an opportunity to remain.
GARRY - I guess my concern, I mean, is those who just make the ability to buy a property and a high amount and then try to sell maybe, like, my cousin chooses to launch a business and COVID and everything. Then to not have to pay the taxes on and offset the increased taxes after they've invested in the community but then technically not affordable and that's on Netflix. So that's one of my concerns.
CONNOLLY - I think it's a valid concern. You know, again, I would just add there are there's a formula in the Bill to really target those more lucrative transactions. Then, of course, there's the opportunity for municipalities, to go further and actually do additional exemptions that might make sense a lot more. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER18 - Thank you. Thank you.
SPEAKER1 - Thank you, Representative. Any other comments or questions, CNN? Thank you, Representative.
SPEAKER16 - Thanks so much.
SPEAKER1 - Representative Bruce Ayers.
To be joined by, Michaela Scott and Grayson Pelletier, 2 students.
SPEAKER8 - Thank you.
SPEAKER1 - District. Thank you.
REP AYERS - HB 2707 - Thank you, Chair Cusack, Chair Moran, and I appreciate the opportunity to be before you this afternoon. I'm joined, this afternoon by,3037 Grayson and, Michaela. We'd like to speak in favor of House Bill 2707 an Act providing for donation check-off boxes on a state tax return for the Massachusetts youth and government program. Mr. Chairman, this program has3054 been around since 1983. Is a non-Partisan program that serves 100 students across the Commonwealth. It's something that I've been involved with, for the past eight years. It teaches students about the legislative process, the policies, and the importance of registering3070 the vote, and encourages them to get involved in their communities. It's an investment in our youth and future leaders.
It's really a unique opportunity where the students participate in a model version of the Massachusetts state government right here at the state house, including electing our own leaders such as speaker, senate president, and governor. They draft their own Bills. They form their own committees. They state important issues to them. It's another unique experience that also teaches some important skill sets firsthand, public speaking, networking, negotiating, and finding a common goal. Mr. Chair, this government program has the confidence and skill set to get involved in their community3119 to know that they can make a difference on issues that are important to them.3123 But today, I'd like them to talk a little bit about the program. The two students here are currently in the program. First, why don't I, have Grayson speaking?
GRAYSON OWENS - CONCERNED CITIZEN - HB 2707 - Thank you, Chair. I'm Grace Intelligence here from Marsh Field High School. Good afternoon. I appreciate the opportunity to provide a testimony on H 2707. I am here before you today with a deep sense of honor, eager to share clearly3153 the profound impact that youth in government since the program has had honor from the youth of Massachusetts. This program serves as a catalyst for character development, leadership enhancement, and the building of confidence among its members. In this past year, this program has had many, delegates, and its difference in the community are taking in our conference. This widespread hidden engagement is a testament to the program's ability to reach out and inspire youth across diverse regions of the Commonwealth.
It reflects a growing interest in civic participation among our use of population. Showcasing the program's potential to foster a sense of responsibility and community involvement. The youth government program has proven itself to be an invaluable, cool educational tool, providing participants like myself with essential life skills through carefully designed activities, the program encourages the development of public speaking skills, research, and the capability to explain and defend well, well-founded arguments this skill extends beyond the program itself, pondering the overall personal and intellectual, well, growth of its participants. As someone who has directly benefited from the youth and government program, I am compelled to express strong endorsement for H 2707.
I firmly believe that this Bill holds the key to unlocking even greater positive outcomes for the Commonwealth of Massachusetts. By supporting this expansion and enhancement of the program, we are investing in the development of informed, engaged, and empowered citizens. In conclusion, I urge you to consider the long-term implications of supporting H 2707. The positive influence of the youth program on the youth of Massachusetts cannot be overstated. This Bill represents a critical step towards nurturing a generation that is not only ready for civil civic life. We've also participated in about, oh, conjuring to welfare of our community. Thank you for your time and consideration. I wholeheartedly support that parts of this Bill will end comfortable in its It's potential to bring a positive change for the youth and youth of the Commonwealth of Massachusetts as a whole. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER8 - Thank you. And Mikaela?
MAKEILA SCOTT - YMCA YOUTH AND GOVERNMENT - HB 2707 - Thank you, Chairs, and members, of the committee. My name is Makeila Scott, and I'm a senior at Mullen High School. I serve as a district leader for the Malden YMCU youth and government. Today, I offer my support for Massachusetts House Bill 2707. Democracy is not a spectator sport, and this is a sentiment I learned through this program. The YMCA youth and government program stands as a vital pillar for the youth of Massachusetts, and it is far more than a club. It represents the youth mock legislature of our state in a time where civic engagement is lacking, youth civic engagement, where political polarization is ever present and voter turnout rates at local and state levels are decreasing across the United States. This program is vital in combating these issues. It engages youth cultivating a sense of civic responsibility and empowering them to be active participants in our democracy.
government encourage people like me to be proactive citizens and advocates for their communities, communities that need our help. Mass YMCA youth and government is more than just a legislative simulation. It is a space for delegates to find their voice, understand the power of their ideas, and learn the importance of collaboration and compromise in a democratic society. My testifying before you all is a testament to the power this program holds. I have been part of youth and government for three years, and I've seen this program through its highs and lows from when my delegation was only five to now 30 people. All of us working together towards a common goal, which is a better Massachusetts. Whether they hold an interest in political science or whether they want to hone their public speaking3395 skills, this is the beauty of the program.
It's inclusivity and boundless reach. However, the progression of this program without adequate funding3403 and support comes to a halt to enhance and expand the reach of this program, we must garner more support from within our communities. House Bill 2707's proposition of donation check-off boxes on state tax returns is a critical step forward in achieving this objective. This voluntary action allows individuals to in invest in the growth and sustainability of youth in government, ultimately fostering the development of informed engaged, and responsible citizens. Not only that, but also invest in a less polarized future, one where we are able to listen and remain open-minded.
Through this nonpartisan organization, people of all beliefs and backgrounds are able to get out of the echo chambers that we are placed in by so media by sharing our personal viewpoints while also hearing others. Listening is just as important as speaking in order to bridge the divide and political police that we see in politics today, discussion is key, and this discussion happens in youth and government, learning to value opinions that are different from our own. This is one of the most valuable skills taught through this program. I found my home within youth and government and so of my fellow delegates, in order to be a stronger Massachusetts and to bridge a divide, I believe it starts with the youth. Thank you for allowing me to testify, and I hope you report out this Bill favorably.
AYERS - Chairs, thank you for making us out of order. Any consideration you could give towards this program would help enhance and encourage students throughout the Commonwealth to participate in this program. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you, Representative, and this committee has been favorable in the past sessions. I'm sure we will be again, but Jim are in.
MORAN - Thank you. Grayson and, of course, Makeila, terrific presentation, I'm curious, if, the two young folks could answer but people say there's a lack of civic engagement lately. What do you attribute that to? I mean, if you want to answer in the context of what may motivate you personally. I think that would be a good response as well.
OWENS - Hi. So I believe if our generation has just found not much interest or importance in government, I mean, due to social media, trending topics and, you know, stuff like that had just not a lot of kids or people, in general, are just interested of what's happening come here in Washington or in our local governments once entirely. But the reason why we joined this is just3560 that I found that is a great way to help people who represent people and show who, ways to, help and I've just always been into, this kind of work.
SCOTT - Thank you. In terms of civic engagement, I think this comes to voting or just being active within our communities, when there are councilor debates and things like that. I just see that my friends have no interest. I mean, when I turned 18, the first thing I did was register to vote. So I also think that you think government is not just politics, it's more about us learning how to hone our skills, as I've said, earlier, and just getting a space to learn different viewpoints. I mean, I live in Malta, the most diverse city in Massachusetts. I think that sometimes we're lacking in hearing, diverse perspectives, so I think that that's something that comes through the program. That's what sponsored my life in politics as well. SHOW NON-ESSENTIAL DIALOGUE
Brett?
AYERS - Under the whole umbrella, brother, Madam Chair, this is a nationwide program and a state program but it's, fostered many about future leaders in local politics, state politics, and down in Washington, DC. So, we're making an investment in our and, I want to thank both, Makeila and Grayson for testifying here this morning. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER5 - Thank you.
SPEAKER20 - Thank you
SPEAKER1 - very much. Any other comments or questions for up Gary?
GARRY - First of all, I want to thank you for these presentations, and I'm glad that you didn't do it in my district because I'd be a little worried. I wonder if there is, a lot of discussion about civility in politics and in this program. I know my own niece went to school and, went into journalism because she said she wanted to tell the truth. So wondering how much you're learning about how to deal with how things in the media trade things, what the truth is, and so forth.
SCOTT - The core values you think I remit are caring, honesty, respect, and responsibility.3682 I think that also ties in with honesty. I mean, we learn through our advisors. Every city program is different, but in my program, we learn about the media and its polarization. We try to get people from all diverse perspectives. So, to answer your question, I think we're learning more about the power that our voice has in being honest in discussion and just sharing our beliefs.
OWENS - Just like Makeila said, there's our delegation that looks into, is particular issues, and we learn both sides of those shoes. We separated into two sides of the room to discuss that issue. We want to do two different sides. These ends, we're more of luck. Our adviser has been, really prevalent in teaching us that there are different viewpoints that we we must look through. Who went looking at a hot topic issue, who went to politics today, and that media can just not just screw mess with your mind and, try to convince your stuff. But we are here at the program and learning, you know, what we are talking about.
GARRY - Thank you, Mr. Chairman. I think we have a good future ahead of us. I like, these two.
AYERS - You know, with the deep, political, bypassed and divides down in Washington. It's nice to see we have an open mind and, future leaders we would like to negotiate. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER3 - Thank you.
SPEAKER1 - Thank you very much. Any other comments or questions? Saying none. Thank you.
SPEAKER7 - Well,
SPEAKER11 - No, sir.
PAULINO - I just3781 want to say congratulations, I am impressed. I think we can put a box in the tax returns, to make sure my wife and I, anybody from the tax tournament, Susan, can contribute to helping children's youth from our town. So, see, they like you. I would love to see that happening in my district. I'll be worried if you live in my district as well. I believe the future and the president of the Commonwealth are great because of you. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER8 - Thank you very
SPEAKER1 - much.
Senator Sears joining us virtually. Senator.
SEN CYR - SB 1786 - Hello. Thank you, Mr. Chair and Madam Chair. I too am chiming in on a number of the local option real estate transfer fee Bills. For you, we have, in this hearing, I believe, a transfer fee Bill from Touro and Law Fleet, local option transfer fees have been filed from Nantucket, Father's Town, Chatham, and all six towns in Marcus Vineyard. This is a very important Cape and Islands issue. I think, what I want to talk about3866 is why a transfer fee is absolutely essential for Cape Cod and the Islands. You heard a lot in this hearing and listening about why this is also important for places off Cape, and we support those initiatives. But what I want to, talk about is the state of housing or the lack of housing on Cape Cod, Montez Vineyard, and Nantucket. I know both of you, Mr. Chair, I know you know Montez Vineyard well. Madam Chair, you are my co-conspirator and partner in representing this most special region in the Commonwealth.
We are, in very dire circumstances on Cape Cod. According to the Cape Town Realtors Association, prices in Varsible County have increased home prices, 80% from 2015 to 2022, jumping from a median home price of about $355,000 to $638,000 in just seven years. But it's actually worse than the extremities of the region on Nantucket with a median home price source of over $2,000,000 and more this vineyard where depending on the town, home median home prices are in the millions. Then in my neck of what's in the outer cape, it will afford the median home in my hometown in Touro, a household has to make $400,000. I am someone who does not own a home, I cannot afford it at this point. I can barely really afford, probably can't afford to buy a home in the part of the district that I grew up in where I live now. That I represent to afford the medium-haul price in Touro, $400,000 a family has to make.
So, basically, my housing solution is probably needing to find a boyfriend who I turn into a husband who makes, I don't know, $250,000 to $300,000 a year. That's not a way that we should be solving our housing and also as a state senator, I'm someone who has a tremendous amount of access and privilege and connections If I am struggling to make it on the outer cape, then what does that mean for scores of community, and our communities here are eroding, and we have been trying to do everything we can. No town has done more in housing than Nantucket. Nantucket has appropriated tens of millions of dollars directly out of its town meeting annual budgets to address housing, on Martha's Vineyard, all six Island Towns teamed up and passed, a housing bank, that will be funded4005 by a transfer fee. I can assure you It is very rare to have any of the six towns of Martha's Vineyard, pulling in the same direction. We are just in dire stances.
We now4016 know, that about 50% of our workforce is commuting over the4020 bridges every day to work here and where other solutions have been discussed,4024 like deeds excise, we are maximizing that here, on the cape. We are maximizing other options as well. I just don't know where we're going to get the resources we need to spend tens of millions of dollars for our communities to build the year on housing we need and preserve the year on housing needs. I don't know if that money's going to come from you know, and and I'm mindful that, you know, our communities generate a tremendous amount of revenue to the Commonwealth. So every time a restaurant4052 has to close on a Tuesday or a Wednesday, a hotel is converted from a hotel or a motel and a BNB to a private residence. That has lost revenue to the commonwealth. I do want to just touch on the specifics of the Bill that I filed, it's Senate Bill 1786.
An auspicious number. What we do in this Bill is we say, look, municipalities have to demonstrate4078 progress on housing production to be able to have a local option transfer fee. I know I represent 19 communities, I can assure you Nantucket and Robinson are doing everything they can on housing. For my hometown, maybe not too much. So what the language includes in Senate 1786 is that basically, municipalities have to meet, several criteria, four out of seven interiors, maybe it's up to nine criteria modeled after MBTA communities to tap into, for a fee. We actually have revised language here, that we will be submitting to, the committee but the part of the criteria says,4119 hey, look, if you're going to have a local option transfer fee, you need to be maximizing your CPA funds.
If you're going to have a local option transfer fee, you've got to dedicate at least 50% of your local option room, you know, room occupancy, either to housing or the wastewater infrastructure, you have to have multifamily somewhere in the town maybe you got to have a Smart Growth District under Chapter 40R. If you're within the MBTA communities, you have to be compliant with MBTA communities. So this is a real acknowledgment that, yes, our communities desperately need revenue. Our communities need tens of millions of dollars to address a housing crisis that has persisted for 20 years and was put on steroids in the pandemic. But also that I believe that our community should have skin in the game and so that is the approach that we've taken, as the committee, marinates and, then shoes on these issues certainly want to put that idea into the4173 ether, and I think it's important that communities are doing their part here.
You know, for better or worse, we cannot solve our housing crisis on Beacon Hill. Land use policy is determined by local municipalities here in Massachusetts. We could have a whole academic conversation about how that local control has resulted in very classic and4193 racist consequences. But here on Cape Cod and here on Marthar's4197 Vineyard in Nantucket, If we do not change course, we will not have, year on we will not have a year of community. We will not be able to provide services for the oldest population is the oldest population here on Cape Cod and anywhere else in New England. So I really urge your strong consideration of advancing some sort of transfer fee vehicle.
Without a transfer fee, I just don't know how Cape Cod and Martha's and Nantucket are going to know that is going to be able to address the housing crisis in the way we need, and I just don't know how we're going to be able to sustain and make a life here. If someone like me needs assistance and is able to afford a home, there is something deeply, deeply wrong with our real estate market, and frankly, our communities are going to need to find a way to subsidize housing for people who make not just below our immediate income, but a 150, 180, 200 percent of our immediate income. I don't know how we do that with4251 the transfer fee. So I really thank you for your time. I'm glad to answer any questions you may have, and I will be submitting testimony, and written testimony as well with specific specific feedback on this idea about criteria and triggers to make sure that communities who have a transfer fee are actually building housing. Thank you. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you, Senator. Any comments or questions from the committee? Seeing none. Thank you.
SPEAKER9 - Thank you much.
SPEAKER1 - Next up, joining us virtually is Representative Mindy Dom, and she's joined by Anna Devlin Gauthier and Mandy Joe Hanicky. 2 counselors from Amherst.
SPEAKER22 - Thank you, Mister Choo. Yes. Can you hear me okay?
SPEAKER1 - Yes. We can.
REP DOMB - HB 3734 - Wonderful. Thank you so much, and thank you for taking me and my, neighbors, my town councilors out of turn. Good afternoon. Chairwoman and Mr. Chair and the Honorable members of the Revenue Committee. It's my honor to come before you today to support the Amherst home rule before, H 3734, which is a local housing transfer fee, and to request a favorable report. As you mentioned, I'm also here to introduce a virtual panel from Amherst to testify, and I'm really grateful that you're allowing us to do this in the virtual format. But first, I want to express how proud I am of Amherst's commitment to building and prioritizing the production of affordable housing in our town. To respond to the local and statewide housing crisis and to do so by wanting to do more and use a mechanism, the housing transfer fee, that helps to generate the revenue to make their aspirations a reality.
I'm sure the town councilors will talk with you about the specifics of the Bill as well as why we need this additional revenue. I hope that their remarks are also greeted favorably. To me, local housing transfer fee proposals are expressions of support, not only to build affordable housing but to find the revenue that our towns need in order to generate that, I hope we can support that engagement. I'd like to introduce, Anna Devlin Gautier first, she's the vice president. No Okay. She's not in, she should I'm introducing Mandy Jo Hanicky first, who is one of our councilors at large, and she'll be followed by Anna Devlyn Gautier, who in addition to being my town councilor is the vice president of the Amherst town councilor. Thank you so4396 much, for letting us step in here for providing us with this opportunity4400 for them to test to notify, and I hope that you'll be receiving these, Bills favorably. Thank you, Mandy Jo.
MANDY JO HANNEKE - AMHERST TOWN COUNCIL - HB 3734 - SB 1771 - HB 2747 - Thank you, Rep Domb, and thank you to the joint committee on revenue for holding this hearing and allowing our virtual testimony. My name is Mandy Jo Hanneke, and as Rep Domb said I'm a town councilor in Amherst, along with councilor, Devlin Gauthier. I sponsored the council at council H 3734, enact establishing a real estate transfer fee upon the transfer of property in the town, city known as the town of Amherst. This special act was approved unanimously by the Amherst Town Council on January 23rd, 2023. Amherst, as well as the Commonwealth, needs to protect and expand both affordable subsidized housing and attainable non-subsidized housing. H 3734, similar to many of the other special acts being heard today, would help do just that. The special Act would enable Amherst to impose through local bylaw up to a two percent tran property transfer fee on select properties in town.4461
4461 The intended bylaw would have4463 the end result of raising $1,500,000 for affordable and attainable housing and Amherst. Up to 1,440,000 from non-owner-occupied property transfers, and a much more modest $33,500 from property transfers of owner-occupied homes above 200 percent, the median assessed value, which is $731,000 in Amherst. Amherst's housing situation is greatly affected by the high percentage of non-owner occupied homes in town due to the presence of the flagship campus of the University of Massachusetts applying the fee to non-owner occupied to provide significant funds for affordable housing. The most important element of H 3734 is the authority it provides to Amherst to regulate this fee bylaw within set parameters. This allows the town to actively4513 adjust the applicability of the fee in response to market conditions.
For example, we would be able to respond to changes in ownership models in order to ensure that the elderly who moved to nursing homes but maintained their homes continue to be exempt from the feet. Enabling legislation at the state level is the most efficient means of creating this flexibility. The special Act is essential to helping Amherst address our affordable4537 and attainable housing crisis. Amherst already devotes a significant share of its CPA funds each year to affordable housing and has a housing trust working diligently to create and support affordable housing, but it's not enough we need additional revenue to continue developing and sustaining housing for our most vulnerable in town. I also testify in support of the local option Bills Senate 1771, and House 2747, the acts granting a local option for real estate transfer fees to fund affordable housing.
However, I urge the general court to ensure that any local option will be based not on a4572 specific value of property, but on a percentage above the area median assessed value and also include transfers of non-owner occupied housing. House values vary widely throughout the commonwealth and setting the application of a fee on a specific value, like $1,000,000, or on only high-value homes and non-owner occupied homes would eliminate the ability of many municipalities that have an affordable housing crisis to utilize this important option. Please ensure that all municipalities are able to avail themselves of the local option. So I urge you to quickly report H 3734 favorably and support its adoption by the general court. In a similar vein, I ask that you also report favorably, Senate 1771, and H 2747. Thank you. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you.
ANA DEVLIN-GAUTHIER - AMHERST TOWN COUNCIL - HB 3734 SB 1771 - HB 2747 - Thank you. Thank you to Rep Domb, Councilor Hanneke, and the joint committee on revenue for holding this hearing and allowing us to speak virtually. My name is Ana Dublin Gauthier, and I have the honor of serving as the vice president of the Amherst Town Council. I'm also the co-sponsor on the Council level of H 3734. It wasn't called that when we sponsored it, but we're glad it's called that now, along with Councilor Hanneke. We are all aware of the housing crisis facing Massachusetts. We do not claim that Amherst is exceptional in facing this crisis. However, we do believe that there is nuance and complexity in how this impacts different areas in Massachusetts and our special Act reflects the particulars that Amherst is facing.
Supporting enabling legislation for cities and towns to impose real estate transfer fees on specific conditions supports us in making progress and affordable and attainable housing. Councilor Hanneke has outlined the particulars and exceptions of this special Act, and I won't repeat them other than to remind you that our intention is for this fee to apply to non-owner occupied4690 homes and for those selling over 200 percent of the median assessed value. so as to not add cost to those purchasing homes and building their future, such as first-time home buyers, is a crucial element of this by law. The diversity of need in cities and towns across Massachusetts and the fluctuations of the market was what initially drove us to create our special Act the way we did. With provisions being regulated by bylaw.
As the home to the Commonwealth's flagship institution, UMass Amherst, we see housing pressures impacting the middle ground of our housing stock. We do not have the same proportion of multimillion-dollar homes as Boston nor the tourism market of the Cape Cod and Islands, but we have a population that fluctuates at a high percentage during the academic year. We have over 8,700 students who live off campus, nearly exclusively renting, and we see that number growing homes into rentals, enabling legislation that allows for the regulation by bylaw versus setting an established monetary amount supports cities and towns who know their needs best in meeting them. Amherst has a strong track record of building affordable housing.4771
We maximize our CPA funding, consistently awarding over the required percentage of funds to affordable housing work, and we are seeing innovative projects come to fruition, including one that we're particularly proud of, which is providing homeownership opportunities, not just rentals. Amherst has just over 96100 housing units, of which roughly 1250 are considered part of the state-subsidized housing inventory. We are still seeing immense pressure on that market. Approximately 30% of our homeowners are cost-burdened, and approximately 60% of our renters4806 are supported. We need to support more affordable housing, and it cannot solely be on the backs of the average home to illustrate this pressure, we recently completed construction on 28 Affordable Studio Apartments, which is one of four projects currently, like, saw is going, that are that are in production right now.
It's a really exciting time. For those 28 units, We received over 500 applications to live there. That demand is overwhelming. The builders are there. The community support is there. The steady funding is not there yet. Our affordable housing trust which will also be submitting testimony to you via email is in need of consistent and steady funding beyond what they have in order to meet the needs of our community and support the needs of the Commonwealth. The steady increase in housing units and population leads to an increased use of our infrastructure. A transfer fee that supports affordable housing allows trust a dedicated source of funding and splitting that revenue to also support infrastructure recognizes an increase in housing production as what it is, growth in our community.
We are very much in support of enabling legislation, such as4875 S 1771, and H 2747, acts granting a local option for real estate transfer fees, Our housing markets are unique in the cities and towns across the Commonwealth, and our local officials know those unique needs. We need to establish sources for affordable housing and the necessary infrastructure to sustain it. Innovative solutions such as transfer fees, which provide this support from within the community itself allow us to realize the values we hold in Amherst and across the Commonwealth. I urge you to report this positively out of committee and support us in continuing to best pass legislation to meet the needs of our community and address the housing crisis statewide. Thank you very much. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - I'm seeing none. Thank you. And next is Representative Simon Cataldo, And he's joined with Keith Bergman and Steven Bader.
REP CATALDO - Good afternoon, Mr. Chairman, and, Madam Chair. Thank you so much for allowing me this opportunity to testify and for taking us out of turn. I believe also on the panel is assistant town manager, Chris Carmody, who I can see on Zoom now. My colleague, from Concord, Carmen Gentile, already testified on this Bill, and you're going to hear from three experts on our local transfer fee Bills. So in light of that, and in order to reduce redundancy and in consideration of the very busy hearing that you have today, going to submit what I was going to say in writing and turn it over to the folks that you have, with you now. But I just did want to add how proud I am of the community for all of the work that they've put into, putting this Bill forward. I appreciate them, and I appreciate you. Thanks very much.
KEITH BERGMAN - CONCORD MUNICIPAL AFFORDABLE HOUSING TRUST - HB 2730 - Keith Bergman, Chair of the municipal affordable housing trust. I want to thank our, legislative delegation for filing this, home rule, petition, H 2730, for a real estate transfer fee for Concord. We're grateful to this committee, for your favorable report on a similar Bill, the last two sessions that the legislator, and we're hoping the third time's the charm, for its passage in this session. It's a home rule petition. It would authorize, the Concord Town meeting to establish a real estate transfer fee of 1% on the buyer for the portion of the purchase price above $1,000,000, with, further exemptions available. Late breaking news, in August, of this year, conquered, home prices were up 7.7 percent from the previous year. So now our median sale price is $1,500,000.
The funds collected from the transfer fee as Representative, Gentile said is $1,900,000 per year. Staff projects, and it would benefit, households earning up to 150 percent of the area's mean income, which is a level that's referenced in zoning, by law. We're focused not only on, the units that are accountable for subsidized housing inventory but also on some workforce housing since we've got a lot of, employees who cannot afford to live in our community. Town meeting recognizes that the conquered needs sustainable, sources, that are readily available when affordable housing opportunities arise. Without those funds, to act quickly, valuable opportunities could be missed. So in 2019, the town meeting established the Concord Municipal Housing Trust, which I chair, town meetings appropriated, $4,000,000, thus far to the trust fund.
But, local funds alone will not be enough, for us to implement the ambitious set of strategies in Concord's housing production plan that, the, four boards that we have with housing in their name in Concord are all working together as a housing roundtable to identify, and periodically, update a list of public and private projects that are ready to go to implement our housing production plan, and the trust will advance priority projects as they become ready to proceed, so the trust funds can be put to work. The trust can act quickly when opportunities arise if funding is available. Before I turn it over, I just want to say I'm honored that we got to follow today, the testimony5166 of, other officials, including the mayor of Boston because, you know, we're all in this together, conquered as part of the metro region. I'm a past president, of the Metropolitan Area Planning Council and a retired manager who worked in Provincetown and Nantucket and a lot of places where affordable housing is a big issue. We've got we're all in it together, and the local communities have got to have the tools to be able to do something about it. So thank thanks very much. SHOW NON-ESSENTIAL DIALOGUE
Stephan.
STEPHAN BADER - LEAGUE OF WOMEN VOTERS CONCORD - HB 2730 - Thank you, Senator Moran, and, Representative Cusack, Chairs, I'm speaking on behalf of the legal women voters5213 of Concord and Carlisle in favor of this homeworld petition H 2730 Oh, I am going to deviate from the script because you've heard it before. Representative Cataldo referenced it. You heard many details from my colleague, Keith Bergman, and Senator Gentile did a terrific job in expressing the town's, position. I want to focus on and I will submit written testimony as well from the 200 and almost 200 members of the League of Women Voters, the Concord. The point of the testimony that I think is most salient for you to, pick up on today is as Senator Sierra5262 just illustrated in Concord with a medium home listing at 1,500,000.
What does that mean if you want to buy a home in Concord? What it means is that you need to be making more than $300,000 a year With interest over 7%, it means you5283 need to make a 20% down payment of over $300,000 and that's going to take up such a chunk of your income if you have 300,000 of income that you can see it's not affordable. It's not sustainable. What is sustainable and what has been sustained is Concord's efforts at creating more affordable housing creating more housing in general. We have a 40B, proposal in front of the town right now that would add 200 rental units, but we need more.5316 We just need more. We hope and urge5320 you to report H 2730 favorably out of committee again, and I would go so far as to urge you to encourage your colleagues on the next committee where it lands to keep it moving along because we can't wait anymore. Thank you for your time and attention. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. And Chris Comadi?
CHRISTOPHER CARMODY - TOWN OF CONCORD MA - HB 2730 - Hi Chairs Moran, Cusack, and esteemed members of the joint committee on revenue. My name is Chris Carmody, and I'm the risk and compliance manager and intergovernmental coordinator for the Town of Concord. I was speaking today on behalf of the Concord Town manager, Carrie Lafour, who wanted to be here, but unfortunately had an urgent scheduling conflict. Thank you for making time today to hear from the public on H 2730 an Act on establishing a real estate transfer fee upon the transfer of property in the Town of Concord. According to the public hearing notice for this hearing, there are no less than ten towns that have submitted a home rule petition for authorization to collect a real estate transfer fee. These towns include Boston, Cambridge, Summerville, Concord, Arlington, Amherst, Row, Wealthy, Province Town, and Chatham.
Clearly, this need for local authorization exists across the Commonwealth. It certainly exists in Concord. The Concord Town manager is seeing firsthand the effects of homelessness, housing, security, and housing affordability in our town. These issues represent a housing continuum that impacts all our residents. In February of this year, Concord worked closely with the Healey Driscoll Administration in the executive office of housing and livable communities to stand up for the homeless sheltered in Concord. The first was kind in our community, and we're also grateful for Representative Simon Cataldo's efforts on that project. This partnership was successful because of the communication advanced work and teamwork between staffers at the office of Liberal Communities and the town.
For those already living in Concord, we were hearing more frequent requests for financial assistance for residents forced to choose between rent and heat or clothing or health insurance or food. Our capacity to provide financial assistance is limited by the generous work of the Hughes Cargo Trust Committee. We hear every day from residents on an income, who report they can no longer afford to live in Concord and are planning to move out. According to the 2022, Concord Housing production plan, 31% of all conquered households are cost-burdened, and nearly 50 percent of renters are cost-burdened. According to this housing production plan, Concoders experienced a net loss in subsidized housing inventory since 2015, and the median home price in Concord has risen 70% during the last decade.
Concords Town meeting voted to approve real estate transfer fees to fund affordable housing twice in 2019 and again, in 2023. The transfer fee of 1% would apply to the home sale value in excess of $1,000,000 as explained by Keith Bergman. Once collected, these funds will be wholly contributed to the Concord Municipal Affordable Housing Trust. Today, there is no dedicated funding mechanism for this trust. The town estimates a projected revenue of around5494 $1,800,000 per year. Such funds would help achieve the5498 town's ambitious strategies for developing more affordable housing in Concord. Please vote to support H 2730, a Bill to allow our town to collect local funds to fund our investment and the commonwealth's vision and affordable housing. Thank you for your time. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you, Chris. Any comments or questions from the committee? Seeing that. Thank you very much. Next, we'll hear from Mayor Ballantine, City of Cambridge, manager, City of Watertown Manager, Pro Akas, and former member of the house and executive director of the MIPC, Mark Traczen.
SPEAKER18 - Cheers,
SPEAKER12 - Perfect.
KATJANA BALLANTYNE - CITY OF SOMERVILLE - HB 2747 - Hello. I'm excited to be here. I'm Katjana Ballantyne. I'm the mayor of Somerville. I'm excited to be speaking as not only the mayor of Somerville but also as the co-chair of the Metro Mayor's Coalition Housing Task Force. My ask to the committee today is to report favorably on Somerville's transfer fee, Home Rule petition number 3845. The Lohar Coalition enables trans for fee Bills. House5578 2747 and Senate Bill 1771. Enact granting a local option for a real estate transfer fee to fund affordable housing. I supported the transfer fees when they were first before me as city councilor five years ago in 2018, and I'm here today as mayor continuing to support this crucial tool. When Somerville first filed the transfer fee, home rule petition, it was one of just two municipalities, in the common note.
Now there are a petition of 10 different ones before you today, and as I learned an additional six have been filed. the home rule filed reflects the consensus across the commonwealth that the transfer fees are the impacts of the crisis. Currently, the median rent for a two-bedroom apartment in Somerville has soared to 3 $1000 a month. The medium home sale is a staggering 941,000. That 17.6% increase in one year. These escalating housing costs have been highly destabilizing for many vulnerable members of our community. We are simply seeking to respond to the human crisis unfolding in our communities caused by the lack of affordable housing supply. The city of Somerville is already doing everything it can to invest in affordable housing opportunities and tenant protections. We need the transfer fee to generate additional funds dedicated to5686 affordable housing so we can develop deeply affordable units and protect our most vulnerable residents. I also want to take a moment to lend my support to generate funds for affordable housing.
YI-AN HUANG - CITY OF CAMBRIDGE - HB 4063 - Chair Moran, Chair Cusack, and honorable members of the committee. My name is Yi-An Huang. I am the city manager for Cambridge. On behalf of the city of Cambridge, I want to express strong support for our local transfer fee, home rule petition, H 4063, by Representative Decker, and the enabling legislation that would grant a local option for a transfer fee to fund affordable housing. This legislation is strong support in our community. Affordable housing is the number one concern that shows up on resident annual surveys year after year by a two-to-one margin compared to the next most important issue. Our city council has spoken clearly with the unanimous 90 vote, on March 1st on March 16th, 2020 in our original home rule petition and also on March 20th, 2023, recently, to reaffirm our support for, both our home rule and this enabling legislation.
As you5766 all know, we are facing a housing crisis in the Commonwealth where housing production, especially affordable housing, has not kept up with demand. The median asking rents in Cambridge exceed $3,400 for a two-bedroom and $4000 for a three-bedroom apartment in our city. More than 6,000 applicants who live or work in Cambridge are now on waiting lists. For housing at the Cambridge Housing Authority, the city recently received more than 400 applications for affordable homeownership units that became available. That is a travesty, and we need to do better. Families, seniors, local residents who grew up in our city, and so many others are being squeezed out. Similar to each of you, my email box is regularly filled with good people who are struggling to stay in their homes and asking for help.
As a5815 city, we have made significant commitments to affordable housing. In this fiscal year, we are contributing more than $40,000,000 to our affordable housing trust. That includes the full 3% of CPA funding and 80% allocated to affordable housing, but it is not enough. Cambridge is working with affordable housing developers to preserve or create more than 900 affordable units, but funding remains our biggest challenge to move5840 these projects forward quickly. There are those Single-family, two-family, and three-family properties in Cambridge grew in value by six to 8% over the last year, and the median single-family home is valued at $1,800,000 in our city. Our real estate industry is healthy.
A small one-time transfer fee applied at the time of sale on our most valuable properties would be a nominal cost for the wealthy but it would generate significant contributions to benefit low-income families who desperately need affordable housing. Our estimate is that a transfer fee in Cambridge, as per our home rule petition could generate more than $20,000,000 per year. This is a meaningful number, and it could have a huge impact on our community, housing up to 60 to 70 more families annually. The reality is there is no silver bullet to solve our housing crisis. We need more tools, more approaches, and more action, and we need to be bold. The city of Cambridge is ready, but we need you. We need more tools to address this housing crisis, and those are things that only this legislative body can provide us. I urge you to move forward with our home rule petition in this enabling legislation, and we can address this crisis if5920 we act together. Thank you so much.
MARC DRAISEN - MAPC - HB 2747 - SB 1771 - HB 3734 - Thank you, Mayor Ballantyne, and Manager Huang, thanks to the House Chair and the Senate Chair and to all the members of the committee. As the House Chair pointed out, when I was younger and had a lot less gray hair, I was a member of the house, and it's always an honor for me to appear before you. I am Marc Draisen, executive director of the Metropolitan Area Planning Council, the Regional Planning Agency for the people who live and work in the Metro Boston region, which includes approximately half the state's population. We are on record supporting the home rule petitions from our region and from outside our region that are before you for a real estate transfer fee dedicated to housing. We are5966 also on record supporting the local option Bill, which is another way to achieve a real estate transfer fee in those communities seeking to do so, and we are also on the record supporting the HERO legislation, which is yet another way.
To slightly increase, actually, double our very low, real estate transfer deal deeds, excise, and half have half the money go to housing issues and half the money go to climate. There are a number of tools for you to accomplish this objective. We at MAPC believe you should do all of them. If you can't do all of them, pick two of them. If you can't pick two of them, pick one of them, and we are always available to work with you on the technical issues of making sure that these bills are drafted in the most appropriate manner possible. On the issue of need, there is no end to evidence of our dramatic housing crisis, but I am going to mention just two things. First of all, over the past several years and continuing today, approximately one in every ten homeowners in Massachusetts, and one in every four renters in Massachusetts is paying more than 50% of their income for housing.
They are not cost-burdened. They are severely cost-burdened and that is a remarkably durable statistic from Provincetown to Pitts Field. In some parts of the Commonwealth, housing prices are lower, but incomes in those areas also tend to be lower. Secondly, and this is less well-known. Over the course of the past year, the request for permits to build new housing units has dropped dramatically. In the inner core, Boston region and immediately surrounding communities, they have dropped by half. They are now lower than they were before the pandemic began. In the MAPC region, they have dropped by a third, but they are also lower than they were before the pandemic began. In Massachusetts, as a whole, they have dropped by a third. They are not yet lower, but they are close to what they were before the pandemic began. We need additional resources.
main reasons for this are increases in interest rates, difficulty finding construction workers, and increases in construction and material costs, largely issues over which this legislature has very, very limited, if any, control. We need additional resources to build more affordable housing, not just to move faster and further. But even just to keep up with what we've been doing in recent years, the transfer fee in its numerous incarnations. Provides a very reasonable and extremely modest way of raising some of this revenue. We encourage all of our communities to adopt CPA and most of them have. We encourage them to increase6153 from 1% to two or three where they can, but it is not efficient, and we should remember that CPA also funds other legitimate and important responsibilities. The state match used to be 100%. Then it went down to, like, 10 to 12%. Then over several years in the recent past, the legislature was able to ramp it up to about a third but now it's back down to a lower number again.
So the real estate transfer fee recognizes that many of our tools have been there for a long time, and we still need additional revenue to build and renovate more housing for our people. I will close by saying the following. Sometimes I say I'm a housing planner married to a housing planner. It is a common topic of conversation at our dinner table. I have been working in this field in one way or another in state government non-profits and in the legislature for the last four decades. I have often said we are going to start losing employees to other parts of the country because our housing market can't keep up. I am now in a position where6222 I am losing employees. I have lost employees and we paid pretty well, I think, at MAPC. We have lost employees to Chicago, Hartford, Albany, to Rochester. These6236 people, often young people, come to me and say the reason I have to move is because I cannot afford this housing market. If we increase our supply, we will begin to address this problem, and transfer fees are one tool, that allows us to do so. Thank you so much for your time. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. You, mayor, and city manager. Any comments or questions? Representative, Ida Hopin?
UYTERHOEVEN - Thank you, Mayor Ballantyne, City Manager, Huang, and Mr. Draisden, our former rep president. Thank you so much for being here and for testifying. Thank you for also, just kind of sharing a wide range of the support needed and, of course, I, want to voice my support as a Rep from Somerville. I definitely, actually, support the proposal here today. I did6282 want to just ask, appreciate the statistics, and if there are any from6286 either the cities or from, a former Rep. I was curious because I know we've heard from previous testimonies about the income needed to be able to purchase a home in our respective cities and in the MAPCs region. I was just curious if you had any statistics on that because I think I want to highlight the issue that highlights is around being able to develop generational wealth, right? And we talk a lot about home sales of people who have that generational wealth. That is certainly a consideration, but this is about people who are trying to put their roots down and also to be able to create, that. So that's when you share about that 50% or more of your income is into paying for your housing. Right? That prevents one, especially when you see such a high number for rent but also for homeowners creates a problem for people who do not have generational wealth.
DRAISEN - Representative. I don't have those numbers at my fingertips, but I know that we have them. Okay. When I get back to the office, I'll talk with our data services folks and make sure that we convey those to you and to the committee.
UYTERHOEVEN - Thank you.
HUANG - Through you, I think, we, we just went through tax rates. So these numbers just happen to be fresh in my mind, but singles twos and three-family homes in Cambridge have a median value is $1,600,000 to $1,800,000. Then condos, which are about 75 percent of the homeowners in our city, are valued at a median of $750,000. I think the value growth is primarily in the single-family twos and threes. That's, I think, particularly as come out of the pandemic where there's the most demand. But I think, to Draisen's point, I think we have seen lower numbers of transactions just because of interest rates, recently. I think one of the things that the local transfer fees, I would maybe emphasize is not just the construction and preservation of affordable housing for rental, But I think in Cambridge and many other municipalities, we are looking at affordable housing homeownership programs, as a tool for building more wealth. This6419 obviously gets a little bit complicated in terms6421 of how it gets structured. But a6423 lot of what we've been discussing with our6425 affordable housing trust is how we create that opportunity so you're not just having homeownership programs that are allowing families to benefit from a mortgage interest deduction, but they're actually able to build real equity and pass that on to their children.
UYTERHOEVEN - Thank you.
BALLANTYNE - Thank you, Representative. I would say that in terms of the two and the three-family homes, you know, we're seeing, about 1.1 to 1.2 for two-family homes. Similarly, there aren't a whole lot of them, but the three families are upwards of one point, $6,000,000. I will share, you know, in Somerville, we're trying to use every tool at all. So I could just share with you a little bit about some of those tools that we, use to, add money to our affordable housing trust fund to create more affordable housing. We have CPA funds. We use affordable housing linkage fees for new development in our transfer areas. With the Affordable Housing Trust Fund, we've added a land acquisition fund, and a municipal voucher, program. We have also, in our zoning overhaul and multifamily houses, we don't have surface parking.
6509 It's6509 all underground parking so we can maximize the land. We have an affordable housing overlay, four stories to go up to stories and, so forth, and, we, you know, also, you know, trying to stay on top of things. I launched an anti-displacement task force, for housing to develop more tools. One of the first recommendations that came out was, in the form of rent stabilization. So we're trying to use every tool possible, and I'm sure I, missed one or two. I would like to share my discussions, with some of the, the developers the large developers who are, looking to build housing in Somerville. They said the interest rates are too high. We can't. I've specifically asked, if is it strictly the interest rates, that are impacting you from a couple of, them who are working on large projects in the city, they said, yes, the interest rates are too high. We have to wait until it slows down. As Mr. Draisen said, you know, we're just trying to keep up with you know, it's a human crisis right now. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER6 - I just have 1 question.
SPEAKER1 - Sure.
REP WHIPPS - Talk with the two or three families. How many of our off-hours do you have any questions?
BALLANTYNE - So in the city of Somerville, we have about 33,000 housing units, about 70, 30% of them are owner occupied, and 70% are rental, 60 percent of our population turns over every three years. That's why we're at 81,000. That's about 50,000 that move in and out of the city every three years to just over 17,000, per year.
UYTERHOEVEN - I just, had another question, related to that because, of my understanding, and I'll just share a short anecdote and then highlight what kind of general piece. If we have more statistics on this, I think it'll be very illuminating, for my colleagues, which is that the house across the street from me went for 40% more than the house I purchased back in 2020, just a mere two years later. Out of the 20-plus bids that were placed on this house, 14 of them were placed by people who were in it was investors, not first-time homeowners. So, I understand that this is an ongoing trend, particularly in the Greater Boston, Cambridge, and Somerville areas, but also it has increasingly become an issue further out, in the state.
So the reality is that the number of people who are able to purchase their homes, who are first-time home buyers is lower and the number of investors, largely very large, right, deep-pocketed investors, has increased because they've viewed real estate as an investment vehicle rather than a place to raise your family or be able to rent out one unit or whatever, you know, the makeup may be. So I was just curious. I know that's something that really drives up the housing market price and it is something that I understand the various proposals for the transfer fee are trying to really get at that so that we can level the playing field between first-time homebuyers well as providing funding for affordable housing, whether it be rental or first time homebuyers.
DRAISEN - Representative. I will answer very briefly because I understand the committee's time is valuable here. We have been doing a lot of research on speculative investment in the housing field, and we'd be glad to share some of those results with you. The inability particularly of non-profit developers to compete in what has essentially become a bidding cash market is an extraordinary impediment to our ability to produce affordable units. All of the communities that I you with, it's certainly, particularly the larger ones are trying to grapple with that issue. To some extent, it is a resource question, which the transfer fee would help with, but there are some structural issues as well that have to be in the draft a drafting order and make some of the traditional developers and the owners of affordable housing able to participate effectively in this market. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER18 - Thank you.
SPEAKER1 - Any other comments or questions? See you, none. Thank you very much. Thank you. Continuing on with Summerville. We have counselor, Ben Young Campin, counselor Jake Wilson, and executive director of the community Several Community Land Trust, Ben Baldwin.
SPEAKER16 - First
page.
SPEAKER8 - Throughout.
BEN EWEN-CAMPEN - SOMERVILLE CITY COUNCIL - HB 2747 - SB 1771 - HB 3734 - Thank you very much Chairs and members of the committee. My name is Ben Ewen-Campen. I'm the president of the Somerville City Council. Just before I get to my remarks, I wanted to mention we've heard a number of good questions about the impacts of these transfer fee home rule petitions on homeowners and so I wanted to clarify Somerville's home rule. It fully exempts owner occupants, whether they be buyers or sellers. So if one homeowner is selling a house to another homeowner, there is no transfer fee. The only person who would pay the 1% is if either the buyer or the seller is not an owner-occupant. So just to clarify. So thank you again for the opportunity.
For so many of our constituents in Somerville, while we're all on the same page, about our6865 top priority being addressing the6867 housing crisis. Whenever we start talking about specific policies, I often see members of the public's eyes glaze over, and get kind of wonky detailed. So I always like to focus on kind of a simple, easy-to-understand fact. The single most important determinant of how much affordable housing gets created is the amount of public money that is available. That's the right limiting step we have more money available, and we get more new housing, more affordable housing built. We have less money. We get less. For all of us who serve in local government or who work with our nonprofit housing developer partners. This is very real. It's not abstract. We know there are many more proposals for affordable housing development that there's funding for.
So we are forced to triage those requests and strategize about which ones we're going to support the DHS to other funders and other ones get kicked into the future, and what this means is that despite the enormous amount of, you know, political will and effort that goes into this in Somerville, we're really nowhere near track to build the amount of affordable housing that we need so desperately. Our home rule petition for a transfer fee would provide a steady resource, a revenue source of conservatively $6,000,000 to $10,000,000 a year, earmarked specifically for affordable and it's a way to take a really, really small percentage of the enormously high-value real estate transactions happening just in Somerville, to help ensure that that go directly to addressing our single biggest issue wouldn't cost the state a cent.
We know from the many studies that we have commissioned and that many of our colleagues and other municipalities have commissioned that it really would not hurt our, market-rate housing, construction numbers at all. As I mentioned, it does not affect homeowners whatsoever, because we've structured the Bill to to fully exempt all owner-occupant sellers and buyers. As you've heard, when we first passed this Bill in 2018, we were one of, at that time, I think only two or three communities that were seeking to enact transfer fees. Now we've heard there are nearly 20 that have either past home repetitions or are in the process of doing so and that is clearly, a sign that this is a policy whose time has come. I'm here along with so many of our colleagues and our surrounding municipalities to respectfully ask you to advance this forward with a favorable recommendation.
BEN BALDWIN - SOMERVILLE COMMUNITY LAND TRUST - HB 3845 - HB 2747 - Thank you, councilor Ewen-Campen. Hi, folks, My name is Ben Baldwin. I am the executive director at Sommerville Community Land Trust, a community organization in Sommerville and an affordable housing developer, here to support the transfer fee here, H 3845. I'll talk a little bit about the work that Summerville CLT does. Without much space and open space to develop from the ground up in Sommerville, the CLT works to take, what we call naturally occurring, affordable housing and, make it permanently affordable by acquiring it, taking public subsidy, and renting or selling to low-income renters or buyers. In all these projects, as councilor Ewen-Campen said, the limiting factor is public funding and where we fall in line, in regards to other non-profit and for-profit developers seeking to provide some affordability.
When we want to provide affordable homeownership opportunities in Somerville, we are completely limited to local municipal funds. So there are no state or federal, sources available for homeownership. So, funds such as those that would be created with a real estate transfer fee are incredibly helpful for providing that kind of homeownership equity building that is so important. As Mayor Ballantyne just said, only 30% of the city of Somerville is homeowners. So we want to make sure that those opportunities are available to, ordinary Somerville residents. As the costs of real estate continue to increase unabated not to mention the costs of construction, legal fees, etcetera.
It's become all the more crucial to find new tools to ensure affordable housing options remain available to low-income folks immigrants, and the diverse cultural communities that make and have always made, Massachusetts Cities and towns what they are. I'm talking about, the childcare professionals, the baristas, the civil servants, and the adjunct professors just to take a few specific examples from our portfolio. I think we can afford to support this legislation for the sake of communities like state-enabling legislation for a real estate transfer fee, H 2747. I want to thank you all for your time and thank Summerville Community Land Trusts friends and colleagues here today, Mayor Ballentyne, the ALOHA Coalition, and the, I think, 10 other municipalities here today supporting similar legislation.7170 So thank you.
JAKE WILSON - SOMERVILLE CITY COUNCIL - HB 3845 - Thank you Chairs Cusack, Moran, and members of the revenue committee. I'm Jake Wilson, the city councilor at-large in Somerville. I appreciate the opportunity to be here today and speak with you all. Representing my constituents, in Somerville to, express support for H 3845. That's the Somerville transfer fee, and home rule petition. Unfortunately, Somerville would make a great poster child for our region's twin housing crisis, affordability, and stability. I'm grateful every day that affordable housing is non-controversial in Somerville. We have the privilege of having the backing of pretty much the entire community when it comes to building and creating new affordable housing. The political will is there. Unfortunately, we often find ourselves lacking the necessary funds to make that happen.
That's where the real estate transfer fee comes in. I wanted to give just a timely and really illustrated example of how that funding can make a real impact. There's a large lot around the corner, from where I live in the Winter Hill Neighborhood of Somerville, knowing around the neighborhood is the old Star Market site. This large lot has sat vacant and blighted for 15 years. Just yesterday, fencing went up because a sale had gone through to a developer, and now I've worked extensively for years, our ward councilor is phenomenal. He and I have worked on this before my time on the council. Now that I'm on the council, with the community to make sure that development comes in that suits not just the needs of the community, but the city as a whole. We're overjoyed to see what's moving forward there. We're talking it's a chapter 40B development that's going to create, mixed-use Nixeus development, 288 new units, 132 of which will be affordable.
We're talking units that are actually attainable. 60%, 80% AMI, two and three bedrooms. This is going to keep people I know in our city. It's going to make a real tangible difference. This is only happening because the city of Somerville has been able to subsidize this because as you heard about, the market forces that are out there, construction costs, everything out there, it's gotten really expensive. There's a shortfall, so the city of Somerville stepped up through a tax increment fine tax and refinancing scheme and through straight subsidization from the affordable housing trust fund in the amount of $6,000,000. We're able to get it to this point. You know, I thought hearing counselor you in camp and speak, he mentioned that an estimated $6,000,000 to $10,000,000 a year that we expect this to make.
That could be one or two of these projects a year. You know, the numbers7344 I just mentioned, like, that's what actually moves the needle here. You know, it's it is great when there's you know, one or two affordable units that come up as part of our inclusionary housing program, 132 units, that's big. That's a big deal. So we've all heard the testimony today. You know, you don't need me to sit here and repeat the excellent points that were made about that. I'll just say, you know, I urge you to please hear our voice is my voice. The voice of my 85,000 constituents in Somerville, give Somerville these other communities, the essential tool to build more affordable housing for working families who see death really needed. I hope to see Somerville's home rule petition and statewide local option enabling legislation get reported out of here, favorably and eventually passed. Thank you. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you, Council. Any comments or questions representative of Idahovin.
UYTERHOEVEN - Thank you all so7398 much for being here in defying. I was just curious, from the Councilor's perspective. I understand that this transfer fee for Somerville will specifically likely raise six to 10 million dollars. We heard earlier from, the mayor of Boston that roughly about 100,000 per unit is the sub needed to make it permanently affordable. Just kind of assuming that, right, we're talking about a hundred or so units, and then a few hundred residents are not displaced from the city. I was curious if you knew from recent years, despite Somerville, using all of the tools available, what that compares right now in terms of, the ability to sort of make these subsidies possible at the city level.
EWEN-CAMPEN - Is the question of how many new units we're able to create under the credit?
UYTERHOEVEN - Affordable units. Yes. With some subsidy from the city or some help.
EWEN-CAMPEN - I mean, I want to clarify that our affordable housing funding doesn't purely go to creating new units. There's a lot of support that gives existing tenants. Rental assistance, lots of other programs. I would just say that the amount of new ground-up affordable housing construction in Somerville is really shamefully small. You know, I don't mean shame on the city of Somerville. I just mean faced with the reality that we have, a couple of years ago, we passed an affordable housing overlay district in our zoning. There is currently one project that is moving forward with that, which did not get funded by the state this year. It is going back next year. We do have success stories to point that, you know, Clarendon Hill for example, but we really are not seeing that kind of 20, 30, 40 unit buildings going up that this kind of funding would allow us to move forward. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER6 - Thank you.
SPEAKER1 - Any comments or questions? Anyone else? Go on and go. Alright. Thank you.
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